Nio (NIO) Stock: Squeezing Shorts Ahead Of Earnings

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Nio Inc – ADR (NYSE: NIO)

8.17 USD +0.53 (6.94%)
Closed: Feb 25, 7:42 AM EST · Disclaimer
Pre-market 8.83 +0.66 (8.08%)

Why NIO Is Headed Up

As mentioned above, Nio is having a strong start to the trading session, but no news has been released suggesting that these gains have a catalyst. Nonetheless, the reason is relatively clear. 

NIO investors have been excited to see an earnings report following several recent announcements. These announcments mean that the company should see, and report some compelling growth in revenue. 

The company is expected to report its financial results on March 5th. Considering that it is February 25th now, the report is just days away, and investors are excited about what they’re going to see. So, we’re seeing a big of pre-earnings buying that’s pushing the needle. 

On the other side of the coin, the short percent of the float sits right under 30%. So, NIO is a relatively heavily shorted stock. When heavily shorted stocks see meaningful movements upward, it tends to trigger what’s known as a short squeeze. 

This is when short positions are abandonned and shares are purchased to return the borrowed shares used to short. This process, known as a short squeeze, is known to lead to very meaningful gains in the short term. In the case of NIO, the stars seem to be aligning right, and a short squeeze may be beginning. 

What We’re Seeing From The Stock 

While Nio hasn’t released any news, the coming earnings report and potential for a short squeeze are leading to excitement among investors. As is just about always the case, our partners at Trade Ideas were the first to alert us to the gains. Currently (7:42), NIO is trading at $8.83 per share after a gain of $0.66 per share or 8.08% thus far today. 

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What We’ll Be Watching For Ahead

Moving forward, the CNA Finance team will continue to keep a close eye on NIO. In particular, we’re interested in following the story surrounding the company’s continued work to sell its electric vehicles throughout the Chinese and global markets. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!

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